Iraq's hired hands under fire as the pot of gold starts to run low

They needed to be hired fast after the 2003 invasion of Iraq. With too few US soldiers on the ground, demand for private security guards was at a level not seen since the mercenary heyday of Congo in the 1960s. Former special forces soldiers from the US and Britain, with their wrap-around shades and swagger, had to be supplemented by Chileans, Colombians and Jordanians.

Iraq was awash with billions of dollars from the US, and company profits soared, while those on the ground were earning much more than US and British soldiers.

But the Iraq boom for private security firms is coming to an end, even without the Blackwater shooting row, according to those in the trade.

"It will not be the same again," said Andy Bearpark, former director of operations and infrastructure for the Coalition Provisional Authority in Iraq and now director-general of the recently formed British Association of Private Security Companies. The $18bn (£9bn) the US paid out for Iraqi reconstruction will not be repeated, he said.

Richard Fenning, chief executive of Control Risks, the British company which has 200 employees in southern Iraq, mainly protecting officials from the Foreign Office and the Department for International Development, echoed the point. "The situation has deteriorated. American money has dried up on reconstruction. So there is a lull," he said. "It sounds counterintuitive, but Iraq has got too dangerous for security companies to boom there."

British companies estimate that combined contracts increased from £320m in 2003 to nearly £2bn in 2004. They put the annual global value of contracts handed out to private military companies at £44.5bn.

Blackwater, which was set up by a former US navy Seal, Erik Prince, is one of the biggest and most notorious. And, for many Iraqis, the most hated.

Its reputation for aggression was reinforced last Sunday when Blackwater was providing protection for a US diplomatic convoy travelling through Baghdad. Blackwater says the convoy was attacked and guards returned fire. The Iraqi government says Blackwater opened fire first and wants it expelled. The US government, which relies on Blackwater to protect its ambassador, diplomats and reconstruction workers, is trying to keep them in the country.

An Iraqi interior ministry spokesman said yesterday an investigation had concluded that Blackwater guards opened fire in Nisoor Square when a vehicle failed to stop. The guards thought they were under attack, according to the report. "They started shooting randomly from four positions in the square, killing 11 civilians and injuring 12 others. The first one who was killed was a driver who failed to stop and then his wife," he said. The report recommended ending immunity for foreign security companies and replacing them with Iraqi firms.

Between Monday and Thursday, US diplomats were confined to the Green Zone amid the uncertainty over the status of Blackwater. But yesterday, despite the Iraqi government's order to expel them, the US embassy confirmed that Blackwater guards were back on the streets of Baghdad on "limited" missions.

Christian Stalberg, a spokesman for BlackwaterWatch, which monitors its activities, said yesterday: "It is out of control and needs to be brought under control. It is a menace internationally and domestically."

Jeremy Scahill, author of Blackwater: the Rise of the World's Most Powerful Mercenary Army, said: "There have been 64 courts martial of US soldiers. There is not been a single charge against any contractor. In the case of Blackwater, there have been a number of incidents and nothing has happened."

Democrats in the US senate yesterday held an emergency committee hearing into Blackwater.

Among the witnesses was Katy Helvenston-Wettengel. Her son Scotty worked for Blackwater and was one of four killed in Falluja in 2004, their bodies dragged round the city and suspended from a bridge. She has a lawsuit against the company. "They have a callous disregard for life. They [the four] were sent into Falluja, though it was a Code Black, as dangerous as it gets, to pick up kitchen equipment, plastic utensils, forks and knives," she said ahead of giving testimony.

The men working for the security companies, while reluctant to talk in public, have their own online chat-rooms, where they exchange views on what they refer to as "the sandpit" - Iraq. They resent portrayals of them as trigger-happy cowboys.

A former member of Blackwater yesterday defended his former colleagues. He portrayed the men as disciplined, many of them, like him, former members of US special forces. "We would never, goddamn, shoot at people indiscriminately," he said. "We have an honour system just like anyone else."

He was suspicious and nervous about talking to the media, partly because Blackwater slaps a lifelong, non-disclosure contract on employees that includes a $250,000 penalty. But he admitted there were problems with guards employed on the cheap who lack training. "We grew too fast and [took on] too many people who had not been in conflict situations," he said.

No exodus

British companies were yesterday reluctant to comment on Blackwater. However, one described the company as being at the "aggressive end of the market", and expressed surprise that the state department still employed them.

But there are still profits to be made in Iraq. Earlier this month the Pentagon renewed its contract with Aegis, a British company run by Tim Spicer, a former colonel in the Scots Guards, at $475m over two years, the biggest single deal in Iraq, to provide "reconstruction security support services".

All the directors of British private security companies said business will improve when the security situation improves.

"There is no great exodus, nothing to panic about," said William James, spokesman for the Olive Group.

Companies are looking at work in other countries, such as Afghanistan and Sudan. Blackwater is diversifying into training US law enforcement officers. Some companies may also move into helping protect humanitarian work, though aid organisations are nervous about this.

John Hilary, War on Want's director of campaigns and policy, said: "There is a massive difference between the provision of security and paramilitary services and the hearts and minds work of delivering humanitarian aid. They are not compatible industries."

As for Iraq, the private security guards are largely unrepentant about their role over the last four years. One of them said: "Someone had to fill the void."

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